Taxi payments group Cabcharge dumping name to drive off as A2B Australia

Taxi payments group Cabcharge will dispense with 42 years of corporate history and change its name to A2B Australia Ltd to reflect the major overhaul of its operations over the past four years to take on Uber and other ride-sharing firms.

Cabcharge chief executive Andrew Skelton said the name change, which requires shareholder approval, was a highly symbolic shift.

"It is heavy in symbolism," Mr Skelton said. "It's a really visible message that our world has changed and so have we".

A2B will become the new corporate entity which houses the consumer brands including the payments system Cabcharge, taxi brand 13cabs and a newly acquired dispatch systems business called Mobile Technologies International, an acquisition which gained the all-clear from the Australian Competition and Consumer Commission on October 18.

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It marks a new beginning for a company which first listed on the ASX in 1999, and which under founder Reg Kermode was regarded as a serial offender in flouting corporate governance rules.

The Cabcharge name has existed since 1976 when it offered a way of making non-cash payments for a taxi fare. Ten years ago it developed Australia's first EFTPOS solution for taxis, with a Cabcharge terminal now in 97 per cent of the taxis on Australia's roads. Mr Kermode died in April, 2014 and under his iron-fisted reign as both chief executive and chairman he ignored constant complaints about the lack of an independent board.

Mr Skelton took over in 2014 as chief executive of Cabcharge, which operates 8500 cabs under the 13cabs banner. He has been busily reshaping the business after being hit hard by changes in government regulations in Australia and by sharp cuts to commissions on what had been a near-monopoly in payments networks inside taxis.

He says the name change reinforces that it is now a personal transport company with a big focus on the customer who wants to get from Point A to Point B.

He predicts that with a population of 25 million, the fierce competition between ride-sharing companies will result in some of them closing their Australian operations. Didi has just entered the Australian market.

"There's unlikely to be room for the multitude of players that are now in the major markets, particularly with their focus is on customer acquisition and they're all underwater financially," Mr Skelton said.

Brinkmanship and deep pockets

"That's not sustainable. There's a game of brinkmanship and who has the deepest pockets."

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He said the surge pricing used by the biggest player, Uber, which lifts the prices paid by customers at busy times, was unpopular with customers and was one of the biggest weapons the tax industry had in luring customers back. "The biggest lesson of the taxi industry is that for some decades we dramatically under-estimated the amount of trips people would be taking," Mr Skelton said. This had opened the way for ride-sharing firms.

Mr Skelton said the company was pleasantly surprised that the name A2B Australia Limited hadn't been picked up beforehand by an entrepreneur in a rapidly transforming market.

"We were surprised that it was available."

He said the Cabcharge brand would still be used in the payments industry. "In payments, the Cabcharge brand lives on."

On October 19, class action law firm Maurice Blackburn said it would launch a case in Victoria against Uber on behalf of more than 1000 taxi and hire car drivers, operators and licence holders, arguing the ride share group operated illegally in Victoria from April 2014 to July 2017, causing financial harm to drivers and devaluing taxi plates. Mr Skelton said while he was focused on building value at Cabcharge, he thought it was a good move.

"It would be wonderful to see someone hold unlawful conduct to account," Mr Skelton said..

MTI was the remaining part of a bigger business acquired by telco group Telstra in November 2017. Telstra bought MTData, a provider of GPS and telematics fleet management solutions, to enhance its offerings in the internet of things sector.